Prepared remarks
Good morning, ladies and gentlemen, and thank you for joining us today for MindWalk's First Quarter Fiscal 2026 Earnings Call. We appreciate your time and interest in MindWalk, formerly ImmunoPrecise Antibodies. Today's call will be led by our CEO, Dr. Jennifer Bath, and Interim CFO, Joe Scheffler. They will provide a review of our financial performance, strategic initiatives and key operational highlights for the first quarter. Please note that a copy of today's presentation, along with our final financial statements, will be available on our company's website for your reference. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements. These are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Factors include, but are not limited to, global, political and economic conditions, changes in the market dynamics and other business risks. Unless otherwise noted, all financial figures discussed today are in Canadian dollars. These statements are made as of today, and we undertake no obligation to update them, except as required by law. For a more detailed discussion of risks and uncertainties, please refer to our filings with the SEC, including our most recent Form 20-F and other periodic reports. I would now like to turn the call over to MindWalk's President and CEO, Dr. Jennifer Bath.
Thank you, Jordan, and good morning, everyone. For transparency, our first quarter results include contributions from our Netherlands operations, which we owned during the period. Six days into the second quarter, we completed the divestiture of those operations, generating $16.1 million in net proceeds. Going forward, we will classify results related to these operations as discontinued operations. This sale strengthened our balance sheet and allowed us to concentrate resources on strategic high-priority and high-margin initiatives. Against this backdrop, our Q1 performance was exceptionally strong. On a total operations basis, we reported record revenue of $7.6 million, up 45% year-over-year. Gross profit rose to $4 million, with margins expanding to 53%. Operating loss narrowed to $2.7 million. Adjusted EBITDA loss was cut in half year-over-year to $1.4 million and net loss improved to $3 million. General and administrative expenses declined, underscoring our operational discipline. Cash ended the quarter at $5 million plus an additional $16.1 million received in proceeds from the divestiture. Importantly, within that performance, continued operations contributed $3.2 million in revenue, up 28% year-over-year. This demonstrates that even excluding the Netherlands site, our core bio-native AI platform continues to deliver sustainable results. These results give us the foundation to move decisively into our next chapter, our rebranding. The rebranding is much more than a name change. It unifies our legacy companies, ImmunoPrecise Antibodies, BioStrand and Talem under one identity, MindWalk. We also introduced our new ticker, HYFT, or H-Y-F-T, highlighting the foundational role of our HYFT technology and redefining biologics discovery. Our new identity reflects our evolution into a bio-native AI platform company operating at the intersection of AI, multi-omic data and advanced laboratory research. Inspired by Charles Darwin's daily thinking path, MindWalk embodies the spirit of curiosity and discovery, revealing hidden biological patterns and transforming them into impactful medicines. At the core of this transformation is our BioIntelligence ecosystem, integrating bio-native AI powered by 25 billion proprietary HYFT connections, generating insights for more clinically viable therapies; a multi-omic platform unifying sequence, structure and function and literature to break down silos and enable hyperscale exploration; an advanced lab with a proven track record, over 15 molecules accepted into clinical trials and over a 98% success rate in our B-cell technology, supporting therapeutics, diagnostics, vaccines and peptides. This is not only a brand evolution, but it's also a business transformation from primarily wet lab services to a scalable intelligence platform model. This opens new pathways through Software-as-a-Service, Data-as-a-Service, asset generation and large-scale partnerships. To summarize, our rebrand reflects three milestones: a unified brand identity—IPA, BioStrand and Talem are now MindWalk; a business model shift from services to an integrated platform-driven bio-native AI company; and a new NASDAQ ticker HYFT, underscoring the role of the HYFT technology across our vertical AI stack. With a stronger balance sheet, scalable growth opportunities and a track record of execution, we are confident in our ability to deliver sustainable value for shareholders. With that, I'll turn the call over to our Interim CFO, Joseph Scheffler, to review the financials in more detail.
Thank you, Jennifer. As a reminder, the Netherlands operations were divested six days into Q2, generating $16.1 million in net proceeds. Beginning this quarter, results from those sites will be classified as a discontinued operation and will no longer contribute to our revenue or expenses going forward. Revenue for the first quarter was $7.6 million, up 45% year-over-year, driven by both project and product revenue growth. Gross profit improved to $4 million, or a 53% margin, compared to $2.4 million, or a 45% margin, last year. Operating loss, excluding amortization and nonrecurring charges, narrowed to $2.7 million versus $4.2 million a year ago. Adjusted EBITDA loss improved to $1.4 million compared to $2.8 million last year, reflecting stronger operating leverage. We also saw progress in expenses. General and administrative costs decreased year-over-year, underscoring our focus on cost discipline. Net loss improved to $3 million compared to $1 million last year. Sales and marketing increased as we invested in a digital campaign to support growth initiatives. Turning to the balance sheet, we ended the quarter with $5 million in cash, excluding the $16.1 million in proceeds from the Netherlands divestiture received post-quarter. The stronger capital position enhances flexibility to advance growth opportunities, including Software-as-a-Service, Data-as-a-Service and translational programs, such as our dengue vaccine initiative. In short, we delivered record revenue, higher margins, disciplined expense control and improved operating results while reinforcing our balance sheet. I'll now turn the call back to the operator for Q&A.
Questions and answers
Our first question comes from the line of Swayampakula Ramakanth.
This is RK from H.C. Wainwright. So first of all, congratulations on the divestiture and also the rebranding of the company, which squarely now says that you are kind of an AI tech biotech company. So a couple of questions, mostly on the financials of the company. In terms of the $4.3 million or so that was outside of the continued operations, what portion of that $4.3 million comes from any products that you continue to carry or also from the AI assets that you currently carry?
RK, thanks for joining us, and I appreciate your question. Regarding the revenue from discontinued operations and which portion comes from products and services we continue to carry: there are very few products and services we do not continue to carry across our full end-to-end spectrum of capabilities. There's really one service in particular that we will not be moving forward with, and we have several alternatives for that service that are preferable from a scientific perspective. That was not a major cash generator. With regard to products and services, the main thing that is remaining with that group, and which was a decent proportion of the revenue and profit margin this last quarter, was the off-the-shelf products. Partially why we saw an increase for the discontinued operations is we made a push in that first quarter to get as many of those products out as possible and we focused on revenue recognition and billing to close those items out under the IPA name. So there's very little that we're not carrying forward with regard to products and services. Importantly, none of the AI products or services are going with that group. Any physical product that has been made as an asset to the company is retained by us, and any service that includes any sort of software or artificial intelligence is housed entirely with the RemainCo.
Okay. And then in terms of the gross margin contribution, which is pretty good, especially showing an expansion of about 50-plus percent, how much of that contribution comes from the continued operations? And how should we think about gross margin from here onwards with the continued operations?
Yes, that's a great question. With regard to gross profit, Canada is a relatively strong contributor, although as previously detailed all of our wet lab sites have been profitable, with Canada contributing a bit more strongly. When it comes to the actual gross profit margin, we definitely have strong gross profit margins coming out of Canada, and you have seen the same with BioStrand. BioStrand has historically been pushing over 90% gross profit margins within the company. That's a big focus for us as we continue to grow BioStrand relative to the remainder of the business and as its contribution to overall revenue increases. We didn't see that hit really hard this quarter. You saw a little bit in the fourth quarter too, which we touched on. One thing to keep in mind is when we see changes, sometimes it's due to research and development activity. Our products, services, applications and software all have very hefty profit margins. When we don't see as much contribution from them, one reason can be slight discounts or R&D in the process of pilot studies and onboarding larger companies. For example, BioStrand very recently signed on one of the top 10 pharmaceutical companies as one of our first large Software-as-a-Service customers. In that initial onboarding, we did some R&D and offered discounts to get their seats and to get them utilizing the Software-as-a-Service. Overall, going forward, we're looking for real growth and a stronger contribution from BioStrand relative to our total operations, which should increase our gross profit margin percentage as we continue with these continuing operations.
Okay. So two more questions on the operations side of things. With the dengue vaccine development, what's the strategy going forward? I know you stated that you are starting some preclinical programs. What's beyond that?
Fair question. What is beyond that? There are a couple of different things, and I'd like to start with the overall philosophy because that drives where we're going. The differentiator in this vaccine from our perspective is incredibly strong. To put a little context, what people typically do in building a vaccine for a virus is to use an entire virus that's attenuated or to use entire proteins. With today's capabilities in AI and in silico technologies, those approaches are somewhat antiquated. For example, with SARS-CoV-2 vaccinations, the mRNA translated into an entire protein and you expose the immune system to many elements it doesn't need to see. We focus on being very specific, drilling into the single part that has the highest potential to assist. I won't get into the technical details of how we did that, but that's what we did. Right now, we have moved into manufacturing and the preclinical trials. What we're looking at in these preclinical trials, shaped by partners we've been speaking to, is the humoral arm of the immune system that generates antibody production. We're asking whether we can generate antibodies in preclinical trials with supporting evidence that the vaccine neutralizes the virus. The next steps include working closely with the NIH, specifically the arm that deals with infectious disease and allergies, which has interest in this area. We also have a couple of different partners we've been speaking with about next steps. We will be running safety and tolerability analyses on these products to ensure safety and tolerability and translation into humans. We will also do something a bit unusual by looking at the other arm of the immune system in addition to antibodies: can we stimulate a specific subset of T cells to hunt down and kill cells that are already infected, preventing the virus from replicating in those cells and furthering infection. We're taking a unique approach. These next steps will involve contributions from partners interested in moving the product forward. Some partners are interested in further preclinical analysis, while others, including the NIH, have stronger interest in taking this project into Phase I clinical trials. For clarity, we are looking to move this into Phase I clinical trials and are focused on partners who are interested in sponsoring it. We ourselves are not looking to fund or sponsor the Phase I clinical trial; we're looking to capture some downstream recognition and potential capital as it advances.
Okay. And the last question from me. As I would imagine, the whole rebranding is aimed at ensuring you are seen more like a tech biotech company rather than the CMO or CRO you had been historically. To be true to that, will you be trying to generate an internal pipeline for the company itself to work on, or will you focus on identifying partners to collaborate with to help progress their pipelines? Which direction do you plan to take the company forward?
That's a great question because the branding touches so much of what we do and where we're going. While the rebranding unifies our image—we had multiple websites and identities that made it harder from the outside to understand who we are—the short answer is we're absolutely doing both. One important point we discussed previously is that we have integrated many in silico applications into our wet lab workflows. We work with partners across the industry—19 of the top 20 pharma companies and over 750 active clients. For each therapeutic program, the in silico component is no longer optional; it is part of the program because the outputs are stronger. Historically, companies focused on discovery with limited data. Today, you can run discovery, ask the key questions up front, identify which candidates will develop well and be safe, and move forward with the best candidates quickly. We're not giving clients the option to skip the in silico integration because it is imperative to making better drugs without increasing risk or dramatically raising costs—data-driven approaches are simply more successful. This integration also enables conversations with technology and hardware companies as well as pharmaceutical companies to highlight our real differentiator: the HYFT technology and LensAI. From an investor perspective, it's important to watch for partnerships that reflect recognition of this rebranding and our capabilities. This is a soft rollout and will ramp over the next few months. Our Head of Sales, Lori Anderson, is driving these conversations effectively. You'll see increased interest and new conversations. Regarding internal products, when we saw results in the vaccine space, we identified what we call a strict HYFT pattern—the fundamental pattern likely representing the original optimized pattern that indicates function of a molecule. When we realized there was one strict HYFT pattern for every single virus, that was a game changer. That insight has continued to bear fruit. We are addressing additional targets. This is not a lofty expenditure for us, but we feel strongly after watching extensive data—literally hundreds of pages of results in the dengue vaccine—that it's a major differentiator and imperative to move a few others forward so people can see the differentiation. In summary, you'll see both full integration and enhanced partnership work. Watch for partners specifically interested in this technology and for internal platform product development as well.
I'll now hand the call back to Dr. Jennifer Bath, our CEO, for closing remarks.
Thank you very much, Jordan. To conclude, this was a strong first quarter for MindWalk. On a total operations basis, we achieved record revenue, expanded gross margins and delivered meaningful improvements across operating loss, adjusted EBITDA and net loss. Our continued operations also grew by 28% year-over-year, underscoring the strength of our bio-native AI platform. Strategically, we sharpened our focus through the Netherlands divestiture, fortified our balance sheet with $16.1 million in proceeds and completed the soft launch of our rebranding to MindWalk, uniting our legacy businesses under one identity. We advanced our dengue vaccine initiative into preclinical manufacturing and further validated LensAI, demonstrating its ability to de-risk biologics development. With a stronger capital base, a scalable platform and a proven ability to execute, we are confident in our trajectory, and we remain committed to creating long-term value for our shareholders. Thank you.